What is it that a small finance bank cannot do?

A small finance bank cannot open its branches in any place like commercial banks, because in the initial 3 years 25% of their branches have to be opened in rural areas .You can read about the Types of Banks in India – Category and Functions of Banks in India in the given link.

Small finance banks cannot give all the loans to any segment like commercial banks. They have to give 75% of their loans to unorganized sectors. Small finance banks cannot give credit cards.

Further readings:

  1. Granting License for Small Finance Banks by the Reserve Bank of India (RBI)
  2. RBI – Reserve Bank of India [UPSC Indian Economy Notes]

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